Estimating permanent income and wealth of the us farm households

Ashok Mishra, Krishna P. Paudel

Research output: Contribution to journalArticle

11 Citations (Scopus)

Abstract

Farm households are unique in the way they derive income when compared to nonfarm households. Farm operators and spouses have dual income sources, from farm and off-farm activities. Further, farm households on an average possess higher wealth than nonfarm households. This article estimates permanent income for the US farm households using data from a large national farm level survey. The estimated income is then used to identify the determinants of wealth accumulation by the US farm households. Results confirm that permanent income is closely related to age of the operator, education, occupation, farm size, location and number of earners in the household. Along with age, permanent income is a significant determinant of household wealth. It was also found that the wealth-income curve is nonlinear, upward sloping, and convex. Hausman's specification test indicates that variations in farm household wealth is better explained by estimated permanent income than observed total household income. Off-farm income cannot be treated as residual or transitory income.

Original languageEnglish (US)
Pages (from-to)1521-1533
Number of pages13
JournalApplied Economics
Volume43
Issue number12
DOIs
StatePublished - May 2011
Externally publishedYes

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Permanent income
Farm households
Income
Wealth
Farm
Household
Household wealth
Operator
Wealth accumulation
Farm size
Household income
Off-farm income
Spouses
Education
Specification test

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Estimating permanent income and wealth of the us farm households. / Mishra, Ashok; Paudel, Krishna P.

In: Applied Economics, Vol. 43, No. 12, 05.2011, p. 1521-1533.

Research output: Contribution to journalArticle

Mishra, Ashok ; Paudel, Krishna P. / Estimating permanent income and wealth of the us farm households. In: Applied Economics. 2011 ; Vol. 43, No. 12. pp. 1521-1533.
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